(Note: Following is an edited version of Michael D.
LaFaive’s remarks at a Nov. 3 ceremony to dedicate the Mackinac Center’s Morey
Fiscal Policy Initiative, established by a $1 million
gift from the Morey Foundation. LaFaive will lead the Morey Initiative.)

I am delighted to be here this afternoon to help dedicate
the Morey Fiscal Policy Initiative.

One year ago today, I was first introduced to Lon Morey
after a speech I had given about Michigan’s fiscal and economic policy
landscape. I had known of the Morey family for years because Mackinac Center
President Larry Reed had frequently mentioned the family patriarch, Norval,
Lon’s father, in our many early conversations, and, of course, because we
dedicated this very conference room to Norval out of respect for him and all
that he had done for the Center.

I would like to share with you some words he sent to Larry,
along with the Mackinac Center’s very first seven-figure gift of $1 million.

"I am able to assist [the Mackinac Center] financially
today because when I started my company, markets were truly free and business
was virtually unregulated. This freedom opened the door to opportunity, success,
expansion and hundreds of good-paying jobs. I understand what the free
enterprise system allowed me to do and I want to help preserve that system."

These words are important to me personally on several
levels and to the Mackinac Center as well. I’d like to briefly explain why.

When I read Norval’s words they reminded me of another
entrepreneur, but this one from America’s early economic history. Many of you
have probably heard of the powerful transportation giant Cornelius J.
Vanderbilt. In 1855, Vanderbilt was a successful transporter of goods and people
on the New York waterways. He became incensed by the fact that the federal
government was subsidizing shipping to England and back for what he considered
to be outrageous sums of money. So he challenged the government by providing the
same service, but without a dime of taxpayer-funded assistance. Before beginning
his business battle on the Atlantic, he said, and I quote:

The share of prosperity that has fallen to my lot is
a direct result of unfettered trade and unrestrained competition. It is my wish
that those who are to come after me shall have the same field open before them.

Thankfully, entrepreneurs like Vanderbilt and Morey had a
vision for the future that went beyond running their own businesses. I often
hear the mainstream media and others talk about entrepreneurs who "gave back" to
their communities after years of operating successful businesses or series of
investments, but I would suggest it is not a matter of giving back, as
much as giving more.

Entrepreneurs, be they Vanderbilt or Morey, give every day.
They produce quality products that people want to purchase voluntarily — all
while meeting a payroll, paying taxes and adhering to often Byzantine rules and
regulations. That they then often choose to donate even more of their precious
resources by way of time, or financial gifts, makes such contributions all the
more powerful.

The Morey family is today — through its foundation and
through its president, Lon Morey — continuing the tradition of working to see
that "those who come after" shall, "have the same field open before them" as
Norval had when he founded Morbark in 1957. They are doing this, in part, by
supporting the work of the Mackinac Center in general, and of the fiscal policy
initiative, specifically.

The generous gift of the Morey Foundation is vital to the
Center’s mission, perhaps now more than ever. Even a cursory review shows that
Michigan’s economy is in very bad shape. Consider these facts involving Michigan
income, gross state product, unemployment and population.

From September 2004 to September 2005, only three states in the country
failed to add net new jobs. Those states were Louisiana, Mississippi and
Michigan.

From 1994 to 2004, Michigan ranked a low 48th in per-capita income growth.

Finally, between 1994 and 2004 Michigan dropped seven spots among the 50 states in per-capita GSP, from 21st to 28th. Michigan’s rate of per-capita GSP growth ranked 50th among the states from 2003 to 2004.

While these metrics are important, there is an
unscientific set of data I would like to share with you to underscore Michigan’s
problems.

Every year since 1977, United Van Lines has
reported on their customers’ destinations. At the end of 2004 they reported that
Michigan’s outbound traffic was at its highest point since 1982, when the state
had an unemployment rate of more than 15 percent.

To sum up, Michigan is becoming the economic France
of North America — and in France even the chefs are leaving. This has dangerous
implications because every car load of people leaving Michigan for states with
more economic opportunity potentially carries with it the next Henry Ford,
Cornelius Vanderbilt or Norval and Lon Morey.

We at the Mackinac Center for Public Policy believe
that it is the state’s poor policy choices that are chasing away its people and
their financial and entrepreneurial capital. That is why the Morey Fiscal Policy
Initiative is so important.

It gives the Mackinac Center a greater opportunity
to be heard on vital matters of economic liberty — to, in the words of Norval
Morey, "preserve that system." The generous grant of the Morey Foundation will
add a certain gravitas to our work. There are at least two reasons.

First, it is an endorsement from an important
Michigan foundation of the Center’s policy prescriptions for creating an
environment that will draw people to the state instead of repelling them.
Second, it will provide us with the resources we need to expand our work with
additional staff, publications and educational programs.

I would like to take a moment to give you a glimpse
into our new Morey Fiscal Policy Initiative. The initiative will be based on
four primary policy pillars: tax, budget, economic development and
privatization. As in the past, we will continue to produce timely studies and
commentaries on these subjects, but now we will be able to publish more of them
and in greater detail than ever before. Allow me to give you two small examples.

In 2002, Michigan entered an ugly recession along
with the rest of the nation. To ensure that legislators would have plenty of
ideas for cutting state spending, the Mackinac Center tasked me to come up with
recommendations for cutting the budget. There were many, many examples of
wasteful spending. Two items we found and publicized involved the Michigan
Equestrian Princess Pageant and the Michigan Horse of the Year Ball.

These were some of the very obvious ones. I knew
there were more examples of questionable spending, but due to limited resources,
I could not delve into every corner of the state budget. I bring these examples
to your attention because this is the type of work the Mackinac Center is doing
and the type of work you’ll see a lot more of thanks to the Morey Foundation
gift.

Consider how time consuming and expensive such
research is. The state budget has about 1,200 line items that often contain
generic "catch-all" descriptions about how state dollars are spent.
Investigating exactly how money is distributed — and what products and services
one line-item funds — can take 20 to 30 hours and cost hundreds, if not
thousands, of dollars in research funds.

It is the Morey gift that will provide us with the
time and resources we need to properly investigate these items, many of which
are buried so deep in the state budget that our full-time, highly paid
legislators are probably unaware of their existence. And budget items are only
one topic covered by the initiative. We will also cover the state’s tax and
economic development climate, as well as the subject of privatization. But our
work will not be limited to Lansing alone.

Detroit, for example, is facing almost certain
bankruptcy if drastic measures are not taken. There is much that could be done
to make city government in Detroit smaller and less expensive. We believe that
Detroit’s precarious financial situation may force the mayor to adopt our ideas.
If so, the Center will be uniquely positioned to make its expertise in
privatization and budget matters available to Detroit’s leadership.

I could spend a college semester talking about all
of the new and unique things the Mackinac Center for Public Policy can and will
do with the generous gift from the Morey Foundation. But we would all be better
served if the Mackinac Center simply showed you what we’re going to do when we
do it. You can rest assured that you will be hearing much about our work and our
influence as we help change Michigan’s economic landscape.

Lon, we are grateful that you are willing to
support the continued work of the Mackinac Center, and I want to thank you again
for a generous gift that will ultimately make Michigan a better place to live,
work and raise a family.

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Michael D. LaFaive is director of fiscal policy for
the Mackinac Center for Public Policy, a research and educational institute
headquartered in Midland, Mich. Permission to reprint in whole or in part is
hereby granted, provided that the author and the Center are properly cited.